Today's news for the franchise & small biz owner

A 1031 exchange is a Treasury Department Regulation and Section in the Internal Revenue Code that allows taxpayers to defer the capital gains and recaptured depreciation taxes when selling real and personal property held in the productive use of a trade, business or for investment.

 A 1031 exchange is an Internal Revenue Code tax rule that allows taxpayers to defer indefinitely capital gain and recaptured depreciation taxes when selling and replacing with like-kind real or personal property held for productive use in a trade, business or for investment.

A reverse 1031 exchange enables the taxpayer to acquire the replacement property before selling the old or relinquished property. Prior to Revenue Procedure 2000-37, a reverse 1031 exchange was not recognized under Internal Revenue Section 1031(a)(3).

When H.R. 3765, the Temporary Payroll Tax Cut Continuation Act of 2011 was signed by President Obama on December 23^rd, 100 percent bonus depreciation or the ability to quickly write off equipment purchases ended. Congress was not able to offset the expense with equivalent revenue generators.

A review of 1031 exchange activity reflects $73.6 billion dollars deferred in 2005 decreasing to $2.5 billion estimated by the Joint Committee on Taxation in 2011.